Latest

Adelaide-based international business accelerator Innovyz has opened applications to the first of its industry-focused nine-month Innovation programs, with applications now open for high growth businesses in the health tech sector.

Michael Fox

Michael Fox managed Google’s online sales and operations agency team for Australia and New Zealand before moving into entrepreneurship. He's a co-founder of Shoes of Prey, an online retail website which allows women to design their own shoes and Sneaking Duck, which sells fashionable prescription glasses online.

If you'd like to enter, you can enter the Sneaking Duck competition here, and the Shoes of Prey competition here. The competition ends 31 March 2012.

Given the competition ends in a couple of days, I thought I'd take the time to analyse the return on investment we're looking to get from the campaign.

In total the competition has cost us around $500 cost of the prize and $6300 in Facebook advertising.

What have we received for this?

1. Increase our Facebook likes

We had around 20,000 new likes over the month we've run the competition. While Facebook reports that 12,572 of these came via ads, the Facebook ads system reports that 17,687 of these new likes came via ads.

The ads system records anyone who saw an ad and subsequently liked the page, whereas the page insights records people who click on an ad then liked us on the page as being an 'On Page' like.

The ad system's number is the better one to use, so we only had around 2,500 new organic likes for the month, which is about normal, so the competition didn't drive any of these.

So for our $6,800 spend we had around 17,500 new people like us at a cost of $0.38 per like. We need to do some further work to understand the value of a like to our business, but my understanding is $0.38 per like is not bad compared to industry norms of around $0.50.

If anyone has industry figures they've seen on this, particularly for other fashion brands I'd love to learn more.

2. Add to our email newsletter subscriber base

We had 4000 people enter the competition. Part of the entry process involved subscribing to our email newsletter, so that's 4000 new email subscribers at a cost of $1.70 per email subscription.

We're only just starting to delve more heavily into the world of email marketing, so we don't yet know what the value of an email newsletter subscriber will be for our business, however talking to other online fashion brands they're generally willing to pay around $4 to $5 for an email newsletter subscriber, so we're well under that figure.

Again, if anyone has figures from other fashion retailers about the value of an email newsletter subscriber I'd love to learn more.

3. Increase sales

We're not entirely sure how much of this was driven by new likers in the month who clicked on our ads versus existing likers, and unfortunately Facebook doesn't allow any tagging of their ads to help with this.

We'll likely try turning off our Facebook ads for a few weeks and measure the baseline sales so we can understand this better.

The only number I can go on is the "Talking about us" figure Facebook provides on our page. Before we started running ads heavily a few months ago this figure sat at around 1000. It's currently on 6000 so for now it's a reasonable estimate that 5/6 of the sales were driven by the ads, or $3250.

It's important to note that the above three results are cumulative, so for $6,800 we received 17,500 likes, 4,000 email newsletter subscribers and $3,250 in sales.

Given we would happily pay $6,800 for the results from each of one and two on their own, overall that's a very good return on investment and a successful competition.

StartupSmart

A free and small business advice website with a variant online start-up business community, whether you are looking for a business mentor or business ideas, StartupSmart will help you in starting a business the smart way.